Navoi region in Uzbekistan with developed industrial production, skilled manpower and rich raw material resources, as well as occupying a strategic location in the central part of the country has all for creation of a huge regional manufacturing complex and industrial center on its territory.
In an effort to increase production potential, acceleration of introducing of innovative technologies and developing of the new kinds of essential products demanded on the world market, leadership of the Republic of Uzbekistan made a decision of establishing the first in the country free industrial-economic zone in Navoi city, the administrative center of the region.
The factor of beneficial location of the Republic of Uzbekistan on the crossroads of trade routes between the huge regional markets of South-East Asia, Central and Eastern Europe, Middle East and Commonwealth of Independent States played a considerable role in making this decision.
The existing favorable conditions for establishment of international transportation and logistics Center on the base of Navoi Airport is an important prerequisite for organizing the new competitiveness products here with the possibility of immediate transportation of finished goods to the ultimate consumers in Europe and Asia.
The Concept of the FIEZThe Concept of the Free Industrial-Economic Zone on the base of Navoi airport grounds the forming the innovation-industrial, transport-logistical, social and recreational complex in 3 stages with mastering about 500 hectares of free area on each of them.
The establishing industrial complex FIEZ with the total area of 564 hectares provides for organizing of manufacture of competitive products in the foreign markets on the base of local raw material resources.
Available raw material potential allows to produce a wide range of finished goods, first of all textiles, sewing and leather-shoe goods, foodstuff, chemical, petrochemical and pharmaceutical output, building materials, as well as electro-technical, telecommunications and machine-building products (photo).
At the same time the preference will be given to the power efficient and green field manufacture and inculcation of innovative technologies and automatization of manufacturing process.
The territory of production complex is expected to be located on the area of 380 hectares near Navoi city. According to the developed lay-out of build over for placing industrial enterprises the territory of FIEZ will be divided into 21 clusters with the area of 6.5 to 25 ha, which allow to create enterprises of various output and scales during the first stage.
At the same time, the organizational measures undertaken now will allow to start the implementation of 20-40 investment projects in the current year, and in the upcoming 2010 to bring the number of implementing projects up to 100-120.
The Terms of Operation
The terms of operation of “Navoi” FIEZ will amount 30 years with the possibility of further extension for additional period. During this period special customs, fiscal and tax regimes, a simplified procedure for entry, stay and departure as well as obtaining of permits to carry out the labor activity by non-resident citizens of Uzbekistan will have an effect.
Legislative and Institutional Conditions
For the effective implementation of the concept of FIEZ in Navoi in Uzbekistan a large-scale work to develop appropriate legislative and institutional conditions for the functioning of FIEZ has been done and now is under process.
The legal basis of operating “Navoi” FIEZ in Uzbekistan is determined by the Regulation on the Free Industrial-Economic Zone “Navoi” adopted in January 2009. According to the Regulation the coordination and operational management of the FIEZ will be implemented by the Administrative Board consisted of representatives of governmental authorities and Directorate of the Zone.
Administrative Board of “Navoi” FIEZ by consideration with the Cabinet of Ministers can select as a Management body the internationally recognized managing company in order to transfer it rights of managing with FIEZ on contract basis.
FIEZ “Navoi” will have an independent budget, formed due to profits from providing of services and other receipts in accordance with national legislation, and also parts of receipts from land lease, buildings and infrastructure facilities. Within the range of budget, the FIEZ Development Fund for the development of infrastructure and increasing the efficiency of operating of the Zone can be created.
Preferences and Incentives
The Government of Uzbekistan has provided unprecedented favorable incentives and preferences for registered enterprises within the FIEZ.
Registered businesses will be exempted from land tax, property, profit, social infrastructure development taxes as well as unified tax payment (for small businesses), compulsory contributions to the Republican Road Fund and Republican School Fund from 7 to 15 years depending on the size of volume of invested foreign direct investment in the amount:
- from 3 to 10 million euros – for 7 years;
- from 10 to 30 million euros – for 10 years. Over the next 5 years the rates of profit and unified taxes payment shall be fixed at 50% level below current rates;
- more than 30 million euros – for 15 years. Over the next 10 years the rates of profit and unified taxes payment shall be fixed at 50% level below current rates.
Also, registered enterprises are exempted from paying customs duties (excluding charges for customs clearance) for equipment, raw materials and components imported for production of export goods for the full existing term of the FIEZ. For raw materials and components, imported for manufacturing of goods to be sold in the Uzbekistan market, customs duties are levied at the rate of 50 percent of the existing rates (excluding charges for customs clearance) with prolonging their payment terms up to 180 days.
Registered business entities will be provided with land parcels under a lease.
Registered companies will be able to exercise payments within the FIEZ in foreign currency, to pay in hard currency for supply of goods, works and services from other business entities – residents of Uzbekistan, and use convenient terms and forms of payment for exported and imported goods.
International Multimodal Logistic Hub
Development of transport logistic complex inseparably linked with implementation of plans for creation of international logistic centre on the base of Navoi International Airport.
Nowadays Navoi International Airport has a certificate of ICAO CAT II Runway, 4,000m X 45m with ILS, Radar and Lighting. In addition to, airport was equipped with the latest navigation equipment of producer Thales, France and Ground handling equipment supporting B747-400F operation. Moreover, airport can handle B747-400, AN-24, TU-154 as it has line maintenance for handling. Fuel capacity is 370,000 Gal. with 24 tanks .
The existing transport-transit potential of Uzbekistan, favorable conditions for using the opportunities of international transit and broad participation in international systems of transport communications open the prospects for creation of international logistic centre on the base of Navoi airport as transcontinental transport dispatch network, connecting East and South-East Asia with Europe, the Middle East and CIS countries.
The first steps in this direction have been done in August 2008, when a big South-Korean “Korean Air” air company started regular cargo flights on the route Seoul – Milano – Seoul with 6 intermediate landings in a week in Navoi city. At the same time regular flights of National Air company of Uzbekistan and Moskoviya Russian air company on the route Navoi – Tashkent – Moscow are being continued.
Beside air communication, Navoi has high transit potential of land transportation.
The developed transport communication network, integrated into the international transport system and which is the key challenge in communication system of Central Asia and CIS countries run via the city. International transport corridors lie in immediate proximity to Navoi airport: railway “Afghanistan – Central Asia – Europe” and automobile road “E-40” of international significance which links Beijing with Paris.
Currently construction of railway passing-track, connecting the city with the following railway trunks are being carried out:
- In the north-west direction – Uchkuduk – Nukus – Volgograd with the next exit via Russia to the European countries;
- In the east direction – Samarqand – Tashkent – Dustik with the next exit to China and South-East Asia;
- In the south direction – Bukhara – Turkmenistan – Bandar-Abbas with the further exit to the Middle East countries and the Persian Gulf.
In addition, with launching of Guzar – Baysun – Kumkurgan railroad in 2007, new railroad connection to Navoi city airport will provide direct access in the southern direction to Afghanistan, Pakistan and India.
In order to organize a complete reference system of distribution of goods in the region of Central Asia by land transport, as well as redistribution of the flow of goods by aircrafts in directions north – south and west – east, warehouses for storage and handling of goods, container floor will be constructed, the railway and road access ways will be summed up, the loading and unloading equipment will be purchased on the territory of Navoi airport.
To date, the construction of storage terminal of future transport and logistics center has been started.
Social and Recreational Conditions
The social recreational complex being created at the moment will allow to provide the staff of FIEZ with favorable working conditions, lifestyle and rest. For these purposes a land plot of 100 hectares on the bank of Zarafshan river flowing near the city of Navoi has been allotted. Here a construction of public buildings is expected with the assistance of “Korean Air” company ( photo)
At the end of 2008 in close proximity to the airport “Navoi” on 4-star hotel with 60 rooms has been put into operation. At present, the possibility of hand over of the hotel under the management of internationally recognized companies, conducting the hotel complexes is under study (photo).
In order to create favorable conditions of recreational rest for staff and workers of enterprises, a construction of a golf club and other sport and recreational facilities on an artificial lake Navoi is being planned in the area of the Zarafshan river basin (photo).
It should be noted that the city Navoi is highly attractive in terms of development of the tourism industry, due to proximity to major tourist centers of Uzbekistan and Central Asia – Bukhara and Samarqand, in which the unique historical monuments of world significance are located. The historic centers of these cities, which are over 2500 years old, are included to the UNESCO World Heritage list.
The Works Have Been Already Started
Along with forming the favorable conditions on legislative level a large scale construction works are being carried out on communications supply, creation of the proper engineering infrastructure, labor security for and vital functions of the staff in Navoi.
Works on construction of two-kilometer extent four-banded automobile road from an International highway “E-40” and three-kilometer branch line from the main railway of international significance have been already started.
Distance from FIEZ “Navoi” to the nearest infrastructure :
- freight terminal of Navoi airport – 4 km,
- railway – 4.5 km (Navoi-Uchkuduk-Nukus railway),
- highway “E-40″ – 2 km,
- electric power substation – 0.8 km,
- water distribution unit – 0.3 km,
- gas distribution unit – 0.4 km.
Within the FIEZ territory railways by a general extent of 1,5 km and automobile road by a general extent of 26 km with step by step access to the manufacturing area will be laid out as well.Free industrial-economical zone “Navoi” will open up for You unlimited investment possibilities of the Republic of Uzbekistan, allow to use advantages of special tax, custom and currency regimes and to increase the competitiveness of Your business.